Research

Ph.D. Research

Ph.D. Thesis Title: Health Shocks, Household Decisions, and State Interventions


Abstract:  In developing countries where medical infrastructure, service delivery systems, and the markets for health insurance are underdeveloped, one important mechanism to cope with the consequences of health shocks is the intra-household substitution of labor. This paper studies the impact of short-term illness shocks on labor supply and wage earnings of prime-aged individuals using data from agricultural households in India. It also documents the compensating intra-household labor supply responses of other non-ill members of the household. We find that an illness shock reduces an individual’s monthly wage earnings by 7.1% via the decline in the individual’s days of employment in the labor market. Further, an illness shock to the household head causes a compensating increase in the wage labor supply of the wife. An illness shock to the wife, however, induces the household head to devote more time to domestic activities. The compensating labor supply responses are only partially able to insure the loss in total wage income of the household. Our results indicate that the gender-based specialization of labor weakens in the event of an illness shock. 


Abstract: We study the welfare impacts of illness shocks on rural agricultural households in Semi-Arid Tropic and Humid Eastern regions of India. These regions are characterized by rainfed agriculture, missing credit and insurance markets, and limited access to publicly funded healthcare infrastructure. We find that illness shocks significantly increase households’ medical expenditures and reduce wage income. However, aggregate non-medical, food, and non-food consumption expenditures are insensitive to illness shocks. Disaggregating illness by the age and the gender of the household members, we observe that illness in male children leads to the largest increase in medical expenditure, and illness in prime-aged adults leads to the largest decline in per-capita wage earnings. We also find illness shocks leading to changes in household dietary diversity, higher travel expenditures, and a compensating decline in spending on education and entertainment. Analysis of risk-coping strategies reveals that households rely on transfers from kinship networks and loans from informal sources like local moneylenders to smooth consumption. While large landowners primarily rely on gifts from kinship networks, landless and smallholders increase borrowings from informal sources. 


Abstract: Conditional Cash Transfer (CCT) programs are increasingly gaining importance as a policy option to achieve desirable health outcomes. Janani Suraksha Yojana (Safe Motherhood program), one of the world's largest CCTs was announced by the Government of India in 2005. Apart from demand-side cash incentivization, supply-side nudges in the form of deployment of financially incentivized community health workers (ASHAs) were provided to reduce informational asymmetry and encourage and assist the expectant mothers, in seeking prenatal, delivery, and postnatal care assistance. Using a retrospective panel on birth histories of children for more than 35000 mothers from the Demographic and Health Survey (DHS) of India, we identify the Intent-To-Treat (ITT) effects of the program on infant survival outcomes. We utilize within-mother variation and compare survival outcomes of earlier-born children, who were not exposed to the program, with the later-born children of the mother, who were exposed to the program in a difference-in-differences framework. Consistent with the structure and timing of cash incentives, we find significant improvements in infant survival outcomes, primarily in the neonatal period. The effect, however, is concentrated in areas where the cash incentives to both the expectant mothers and ASHAs were high. The results suggest plausible complementarities between supply-side informational nudges and demand-side cash incentivization in reducing infant mortality.


Ongoing Research